Indian carriers have warmly welcomed the Union Cabinet’s landmark approval of a ₹10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund, calling it a vital lifeline for an industry crippled by soaring operating costs. Led by a joint appreciation from major operators including Air India and IndiGo, the aviation sector expressed profound gratitude for the government’s timely intervention, noting that the cushion will protect margins and allow for far more predictable ticket pricing. The emergency measure follows a catastrophic spike in international energy markets driven by the escalating conflict in West Asia and the compounding closure of Pakistani airspace, which forced carriers to take longer, fuel-heavy routes to Europe and North America. Consequently, global jet fuel prices skyrocketed nearly two and a half times from ₹60.5 per litre in March to an unprecedented ₹142 per litre in May, forcing domestic airlines to aggressively cut down over 250 daily flights to mitigate severe financial bleeding.
Administered as interest-free advances to state-run Oil Marketing Companies (OMCs), the self-sustaining revolving fund will directly absorb under-recoveries and absorb international price shocks over a 36-month horizon. To offer immediate relief to domestic commuters, the government has capped domestic ATF prices at ₹75.6 per litre, significantly reducing the direct pass-through of fuel spikes to passenger ticket pricing. Industry analysts emphasize that because jet fuel accounts for roughly 40% to 60% of an airline’s total operational expenditure, this multi-billion crore safety net successfully safeguards 77 lakh jobs tied to the broader aviation ecosystem and preserves massive public infrastructure investments. Under the reciprocal framework, participating airlines will sign a three-year memorandum to procure fuel exclusively from domestic OMCs, with the state recovering the advance once global crude benchmarks eventually moderate.
